Last week the federal government proposed stricter limits on mortgage lending. For anyone over the age of 50, the new rules sound a lot like the old rules: a 20 percent down payment to get the best mortgage rate, and total debt payments not to exceed 36 percent of household income. The new regulations will be good for the housing market of the future. Unfortunately, they will further destabilize the structurally unsound housing market of today.

A little bit of history. Beginning in the mid 1990s, the United States experienced a unique confluence of events: a housing market that was growing because of the aging of the baby-boom generation into the peak home-buying age groups and relaxed mortgage lending rules. If only the regulators had let well enough alone and allowed boomer demand to drive homeownership to historic heights. But that wasn’t good enough for some, so the market was juiced with easy credit. Kaboom! Homeownership rates and housing prices soared, creating a housing market with the structural integrity of Tinkertoys. It was bound to collapse and it did. But, like a game of Angry Birds, the collapse is not yet complete. A greatly weakened housing market is straining to stand but destined to fall because of the demographics. To be blunt, there is no good news for housing in the demographic trends. Let’s examine them generation by generation.

Millennials: Not Buying. The large millennial generation has now filled the 30-to-34 age group, when homeownership becomes the norm. If housing had not been juiced with easy credit, millennials would be buying homes and stabilizing the market. But falling prices, unemployment, and job insecurity are driving them away, undermining the foundation of housing. According to the Census Bureau’s latest geographic mobility report, the number of people who moved because they wanted to own rather than rent fell by a whopping 53 percent during the past five years–from 3.7 million in 2004-05 to 1.7 million in 2009-10. Between 2004 (the year the homeownership rate peaked) and 2010, the homeownership rate of householders aged 30 to 34 declined more than any other–down 5.8 percentage points to 51.6 percent. The rate is still falling. As of the first quarter of 2011, only 50.3 percent owned a home. Even if they want to buy, bigger down payment requirements and student loans (37 percent of householders under age 35 have student loans) will prevent many from getting a mortgage.

Generation X: Underwater. No one has been hurt more by the housing crisis than Gen Xers. They were most likely to buy homes when prices were peaking, and they are most likely to be underwater today. According to a Pew survey, 21 percent of homeowners with a mortgage were underwater in 2010. The percentage was 25 percent among 30-to-49-year-olds. With housing prices continuing to decline, the number who are underwater is growing. Trapped in their expensive homes, the mortgage interest payments of householders aged 35 to 44 are an astounding 66 percent above average, according to the Consumer Expenditure Survey. This generation will not be moving up, another lethal crack in the structure of today’s housing market.

Boomers: Downsizing. Each year 2 million homeowners aged 45 to 64 move, joining the growing ranks of Americans who are losing money on their biggest investment. According to Zillow, 37 percent of homes sold in April 2011 went for less than their purchase price, not to mention the target price boomers had in mind when they planned their empty-nest and retirement years. Those movers may be the lucky ones, able to unload their white elephants ahead of the crowd as their peers create an increasingly top heavy and unstable housing market. According to the 2010 Del Web Baby Boomer Survey, 42 percent of 50-year-olds and 32 percent of 64-year-olds plan to move when they retire. Many will have to change their plans.

Older Americans: Indebted. Once upon a time, it was the norm for older Americans to be debt free. Today, millions of householders aged 65 or older are in debt. Twenty-seven percent of homeowners aged 65 or older had a mortgage in 2009, according to the American Housing Survey, up from 18 percent ten years earlier. The Survey of Consumer Finances finds fully 62 percent of householders aged 65 to 74 having debt (including mortgage and other types of debt), owing a median of $48,100. The debtors probably planned at one time to sell their house and pay off their obligations. Oops! Now their wealth is frozen, creating financial hardship and threatening the inheritance of the next generation–another crack in the structure of the housing market.

Like I said, there is no good news for housing in the demographics trends.

By Cheryl Russell, editorial director, New Strategist Publications. For more about the housing market, see the all new 3rd edition of Americans and Their Homes, available in hardcopy or as a PDF download with links to Excel files of each data table. If you have questions or comments about the above editorial, contact demographics@newstrategist.com.

BET YOU DIDN’T KNOW

Percent of the owners of new homes (built since 2005) who are underwater on their mortgage: 24.

A few weeks ago, the FBI released its preliminary crime report for 2010, showing–yet again–a decline in violent crime (murder, forcible rape, robbery, and aggravated assault). The rate of violent crime today is lower than at any time since the early 1970s, and nobody can figure out why. With the large millennial generation inflating the most crime-prone age group (40 percent of people arrested are aged 15 to 24) and unemployment stubbornly high, most believed crime would rise rather than fall.

Some say crime is down because so many criminals have been locked up. Others say crime is down because policing has become smarter and more effective. But the steep decline in crime throughout the United States begs for a deeper, sociological explanation.

Here it is: helicopter parents. Yes, you can thank those obnoxious, overbearing parents you’ve heard so much about because–over the past few decades–they have succeeded in transforming the teenage and young adult milieu. The rate of violent crime peaked in 1991. The young adults of that year were born in the late 1960s and early 1970s–just before the baby-boom generation became the nation’s parents en masse. Boomers had fewer children and focused more on the success of each one, keeping their teenagers busy with supervised after-school activities. At age 18, they shipped them off to college where they spent their free time drinking and hooking up rather than hanging out on street corners. When they graduated from college into a job market that, by all accounts, should be turning the desperately unemployed into criminals, boomers welcomed them back into their homes and kept them out of trouble.

Surprise. The baby-boom generation managed to do something right.

By Cheryl Russell, editorial director, New Strategist Publications. If you have any questions or comments about the above Q & A, contact demographics@newstrategist.com.

BET YOU DIDN’T KNOW

Percentage of married-couple households that include children of any age: 54%

The Census Bureau has been releasing loads of 2010 census statistics, which can be accessed at this site. Here you will find demographic profiles for the nation, states, and local areas. The tables include total, male, and female populations in five-year and selected age groups, Asians and Hispanics by ethnic group, household type, household relationship, housing occupancy, and housing tenure. In addition to providing access to tables, the Census Bureau has also released four 2010 census reports: 1) An Overview: Race and Hispanic Origin and the 2010 Census; 2) Population Distribution and Change: 2000 to 2010; 3) Age and Sex Composition: 2010; and 4) The Hispanic Population: 2010.

You have $34 in your wallet right now. That is the median amount of cash carried by the average American, according to the Survey of Consumer Payment Choice (yes, there really is such a thing). A paper published by the Federal Reserve Bank of Boston (The 2009 Survey of Consumer Payment Choice), accessible at this link, has analyzed the results of the survey. Among the findings: The average person makes 64.5 payments during a typical month (including everything from buying groceries to paying credit card bills), 29 percent with a debit card, 28 percent with cash, 17 percent with a credit card, 13 percent with a check, and 5 percent through online bill payments. During a year’s time, 77 percent of Americans go into a bank to do business, 69 percent use an ATM, 61 percent use online banking, 32 percent use telephone banking, and 9 percent use mobile banking services on their cell phone.

This hurts: The mobility rate of the nation’s homeowners remained at the record low of 5.2 percent in 2009-10, unchanged from the rate of 2008-09. The Census Bureau’s latest geographic mobility figures, available at this site, show a nation of movers paralyzed by the collapse of the housing market. Among renters, a much larger 29.0 percent moved in 2009-10, down slightly from the 29.6 percent who moved between 2008-09. Renter mobility has changed little over the decade–it peaked at 30.8 percent in 2001-02. During the past decade, homeowner mobility has been as high as 8.1 percent.

BET YOU DIDN’T KNOW

Number of metropolitan areas in which Hispanics are the majority of the population: 17.

Here are five all new and expanded, one-stop resources for understanding American consumers–vital, cost-effective information in these economically uncertain times. All are available as hold-in-your-hand books or pdf downloads with links to Excel spreadsheets.

· The American Marketplace: Demographics and Spending Patterns, 10th ed. Quick and easy access is the goal of the new 10th edition of The American Marketplace: Demographics and Spending Patterns, your reliable alternative to the threatened Statistical Abstract. Designed for convenience,The American Marketplace draws on scores of government sources to give you a population profile of the United States in one handy volume. Its hundreds of tables are organized into 11 chapters covering attitudes, education, health, housing, income, labor force, living arrangements, population, spending, time use, and wealth. This edition of The American Marketplace contains the latest 2010 census data by age and sex, as well as population totals for states and metropolitan areas. The book includes attitudinal data from the recently released 2010 General Social Survey. Plus, you get the latest numbers on the changing housing market. Also included are 2010 labor force statistics, and the latest income data. The wealth chapters includes newly released information on what the Great Recession did to net worth, assets, and debts. The spending chapter reveals how spending patterns are changing.

ISBN 978-1-935775-27-0 (hardcover);

ISBN 978-1-935775-28-7 (paper); 642 pages; June 2011

· Americans and Their Homes: Demographics of Homeownership, 3rd ed. The all-new third edition ofAmericans and Their Homes: Demographics of Homeownership–the first update since 2005–is already creating a buzz in the real estate industry with its up-to-date look at homeownership and the housing market through 2010. InAmericans and Their Homes, which contains 50 percent more information than the previous edition, you get the very latest demographic data profiling the nation’s homeowners and renters–their age, income, household type, race, Hispanic origin and region of residence. You will also learn about their homes–heating, cooling, kitchen and laundry equipment, purchase price and value, housing costs, and much, much more. New to this edition of Americans and Their Homes is much more data on the demographics of renters and the characteristics of their homes and apartments. As it becomes more difficult to buy and sell houses, renting has become a viable alternative for millions of Americans–especially young adults. Americans and Their Homes shows you who rents and what they rent. Despite the turmoil of the Great Recession, most homeowners still have plenty of equity in their home. But a growing number are underwater. Americans and Their Homes: Demographics ofHomeownership reveals these trends and gives you the facts behind them.

ISBN 978-1-935775-29-4 (hardcover);

ISBN 978-1-935775-30-0 (paper); 624 pages; June 2011

· The Who We Are Series brings you, in three accessible volumes, which can be purchased singly or as a set, the facts you need about the size and characteristics of the country’s Asians, blacks, and Hispanics–the most rapidly growing segments of the consumer marketplace. In each volume,chapters examine attitudes, education, health, housing, income, labor force status, living arrangements, population, spending, time use, and wealth (in Blacks and Hispanics only).

New to the second edition of the Who We Are Series is a chapter on the attitudes of Asians, blacks, and Hispanics on issues ranging from happiness and trust in others to religious beliefs, political identification, and support for gay marriage. The population chapter includes 2010 census data showing numbers nationally and by state and metropolitan area. The spending chapter examines how Asians, blacks, and Hispanics prioritize their money, and the time use chapter shows how they prioritize their time. Also included in these volumes is the most recent information on the incomes, labor force participation, educational attainment, college enrollment, and living arrangements of Asians, blacks, and Hispanics.

For your convenience, all of New Strategist’s titles are available as searchable single- and multiple-user pdfs that are linked to spreadsheets of all the data tables in each book so you can do your own analyses and create PowerPoint presentations.